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If you are in debt, you will find nothing worse than this. The whole day’s exertion and the constant pursuit of creditors are destroying your life. If you are ready to turn the tide and get out of the debt crisis and change your life completely, then this idea is correct. You have to negotiate with your creditors.
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This article can help those who have experienced financial crisis, such as business failure, illness or other financial shocks. If you are only in debt for years, you can also use these steps for reference, but you need to be prepared to convince creditors with a fresh determination.
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Here are some suggestions to help you renegotiate your debt.
- 1. Self help. Many people are willing to give you advice and charge a certain fee, including some non-profit organizations, which can really help you in a crisis. To save this money, I will find ways to solve the problem myself. Don’t spend money on it. You will have more money to pay your creditors, and your situation will get better and better. If you can’t do it by yourself, look for a reputable non-profit organization.
- 2. Explain your situation to each creditor. Call the creditor and explain your situation. Let them understand why you can’t pay the debt on the specified repayment date. Explain how you can avoid repeating the mistakes in the future and the relevant measures. Once you and each creditor have clarified the problem, you will not be in debt crisis again.
- 3. Propose a plan. Give each creditor a sincere debt repayment plan and explain how you will repay the debt. In general, your proposal has two results: lower monthly payments and lower interest. In some cases (and possibly all), you have to propose a complete exemption from interest. In some cases, you may even need to propose a partial reduction of the principal.
- 4. Be prepared to be rejected. Your proposals are often rejected. Remember, this is negotiation. If you are in debt, your creditors have the right to collect it. If you can’t guarantee a satisfactory explanation to all creditors, you must finally persuade them to accept a slightly lower specified repayment, at least for the time being.
- 5. Perseverance. You may need to call again and again to find creditors who can accept suggestions and make plans that they can accept.
- 6. Complete plan. When you negotiate with each creditor, be honest with them and yourself. Look at the total installment payment. If you can’t pay off the installment proposed by the creditors, you should tell the truth. Get them to accept your offer and remember to put the big picture first.
- 7. Optimize debt. Your creditors are different. If you have a mortgage on your house, the loan bank will have no worries and may not need to renegotiate. If your debt is higher than the value of your house, you may return your mortgage and move to a place where the rent is affordable. If your car loan is higher than the value of the car, take advantage of the good condition of the car to sell at a high price, and take the initiative to return the car, so that creditors can avoid the cost of recovery. If you can’t pay in full, the creditors will not let you continue to own the car. If the value of the car is higher than the car loan, sell the car, use the money to pay other creditors, or buy a used car. Those creditors who do not have a mortgage can only accept the amount you can pay. If you owe $10000, you can only use the money you have and will earn to pay it back.
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In the end, if you can’t negotiate with all creditors one by one and reach an agreement with everyone, then prepare to file for bankruptcy. Talk to a lawyer.